ILNews

Opinion regarding insurance company considers definition of ‘ever’

Back to TopCommentsE-mailPrintBookmark and Share

An Indiana Court of Appeals panel was split in an opinion released today that considered the definition of “ever” on a home insurance application when it came to whether the homeowners insurance coverage was ever “declined, cancelled, or non-renewed.”

While the majority opinion found that “ever” should include all insurers who may have cancelled the plaintiffs’ coverage, a dissenting judge wrote that in this case, “ever” should have only included the cancellations by the defendant insurance company.

In Allied Property and Casualty Insurance Company v. Linda Good and Randall Good, No. 85A04-0905-CV-240, Linda and Randall Good had a fire March 16, 2003, that destroyed their home and all of its contents.

Only Linda’s name was on the policy she had with the insurance company. The policy was to last one year, beginning July 2, 2002. The insurance company had neither denied nor paid their claims regarding the fire pending an ongoing investigation concerning the fire’s cause. Linda sued March 9, 2004, for breach of contract based on the non-payment of the claim.

Two trials took place. The first trial was in December 2008, which ended in a mistrial. The second trial in January 2009 was bifurcated to address Linda’s breach of contract claim, to address Allied’s third-party claims against Randall that he made false statements about the fire, and to address Allied’s counterclaims against Linda.

Among Allied’s counterclaims were that Linda misrepresented her insurance cancellation history on the application. If the insurance company had known her true cancellation history, Allied claimed, the company would have either denied her coverage or required a higher premium for the coverage.

After hearing the evidence in the January 2009 trial, the court entered a directed verdict for the Goods. The jury awarded slightly more than $1 million in damages to Linda.

However, the Court of Appeals disagreed with the trial court, finding that because Linda acknowledged that at least one and possibly three insurance companies had cancelled policies held by Linda and Randall, she had indeed misrepresented her cancellation history on the application when she claimed she was never denied coverage.

Linda claimed that because the way the form was worded, she interpreted it to mean whether she was ever denied coverage by Allied, and therefore didn’t include her cancellations from other insurance companies.

The Court of Appeals found that this misrepresentation was material in this case.

“A misrepresentation on an application for an insurance policy is ‘material’ if the fact misrepresented, had it been known to the insurer, would have reasonably entered into and influenced the insurer‘s decision whether to issue a policy or to charge a higher premium,” wrote Judge Melissa S. May for the majority.

However, in a footnote the court clarified this definition by adding, “Our opinion … should not, and cannot, be read to encourage, or even permit, parties to comb through insurance applications in hopes of finding any false statement in an effort to reduce premiums or avoid paying benefits. Only a ‘material’ false representation could permit either result.”

Because of these findings, Judge May wrote, “the trial court erred by denying Allied’s motion for summary judgment. We reverse and remand for entry of judgment for Allied on all counts.”

However, while Judge Michael P. Barnes concurred, Judge L. Mark Bailey wrote a 9-page dissent.

Including an image of the application field in question, he wrote the application field about past insurance cancellations was unclear as to whether “ever” included all insurance companies or just Allied.

“Taking ‘ever’ out of its context seems to me to disregard how a reasonable person could construe the question,” he wrote. “Reading the form as presented above, a reasonable person could indeed interpret the item about prior cancellations as pertaining to the current insurer – particularly since the section heading is ‘INSURANCE COVERAGE,’ not ‘Prior Insurance Coverage,’ ‘Coverage History,’ or the like.”
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
Subscribe to Indiana Lawyer
  1. IF the Right to Vote is indeed a Right, then it is a RIGHT. That is the same for ALL eligible and properly registered voters. And this is, being able to cast one's vote - until the minute before the polls close in one's assigned precinct. NOT days before by absentee ballot, and NOT 9 miles from one's house (where it might be a burden to get to in time). I personally wait until the last minute to get in line. Because you never know what happens. THAT is my right, and that is Mr. Valenti's. If it is truly so horrible to let him on school grounds (exactly how many children are harmed by those required to register, on school grounds, on election day - seriously!), then move the polling place to a different location. For ALL voters in that precinct. Problem solved.

  2. "associates are becoming more mercenary. The path to partnership has become longer and more difficult so they are chasing short-term gains like high compensation." GOOD FOR THEM! HELL THERE OUGHT TO BE A UNION!

  3. Let's be honest. A glut of lawyers out there, because law schools have overproduced them. Law schools dont care, and big law loves it. So the firms can afford to underpay them. Typical capitalist situation. Wages have grown slowly for entry level lawyers the past 25 years it seems. Just like the rest of our economy. Might as well become a welder. Oh and the big money is mostly reserved for those who can log huge hours and will cut corners to get things handled. More capitalist joy. So the answer coming from the experts is to "capitalize" more competition from nonlawyers, and robots. ie "expert systems." One even hears talk of "offshoring" some legal work. thus undercutting the workers even more. And they wonder why people have been pulling for Bernie and Trump. Hello fools, it's not just the "working class" it's the overly educated suffering too.

  4. And with a whimpering hissy fit the charade came to an end ... http://baltimore.cbslocal.com/2016/07/27/all-charges-dropped-against-all-remaining-officers-in-freddie-gray-case/ WHISTLEBLOWERS are needed more than ever in a time such as this ... when politics trump justice and emotions trump reason. Blue Lives Matter.

  5. "pedigree"? I never knew that in order to become a successful or, for that matter, a talented attorney, one needs to have come from good stock. What should raise eyebrows even more than the starting associates' pay at this firm (and ones like it) is the belief systems they subscribe to re who is and isn't "fit" to practice law with them. Incredible the arrogance that exists throughout the practice of law in this country, especially at firms like this one.

ADVERTISEMENT